GST Trends In Web Designing And Development Field
GST has captured a lot of attention so far. This is because of the fact that it is both useful as well as a disadvantage for different types of businesses and services in our country. GST is the short for Goods, Services and Tax. The GST is an indirect tax imposed in the country in place of central as well as state taxes. Earlier, there were more than one tax for each type of goods and services, but now there is only a single tax in the form of GST.
Online web designing and development services have seen a huge impact after GST Registration was implemented. Startups and new businesses are hugely affected by it. The logistics costs will be reduced and the simple taxation system is easier to understand. The software field was affected as it necessitated the need for changing the systems with the help of IT coordinators and tax experts. Specifically, the Enterprise Resource Planning or ERP software had to be upgraded accordingly with the new rules on GST.
The accounting software in most companies have been redesigned to be able to calculate GST. This has increased the sale of such GST software that calculate the GST benefitting the development sector of the software industry as well as its distributors and sellers.
GST Rates For Web Design And Development Services
The Goods and Service Tax charge in the country has been categorised into 6 types. There are four slab rates for goods and services under GST for standard goods and services, essential goods and services, luxury goods and services, etc. These have slab rates of 12 %, 5 %, 18 % and 28 %. The GST for the IT sector including software products, services, electronic downloads, IP transfers, etc is 18 % inclusive of the ITC or Input Tax Credit.
Within the same state, the GST rate will be including the Central Goods and Service Tax or CGST and the State Goods and Service Tax or SGST with 9 % each respectively totalling to 18 % rate of GST. The Integrated Goods and Service Tax is applicable for outside state and country and is 18 %.There are a few exemptions to GST Registration. For those web services and IT software companies that have a turnover less than 20 lakhs within a year need not go for GST Registration. However if the supply of services is out of state, then GST needs to be registered.
The IT or Information Technology Web Design and Development Services fall under the category of SAC codes or the Services Accounting Codes of the tax classification for Goods and Services. The 998314 Code is used for it and it comes under the section 8 which deals with Business and Production Services. The Business and Production Services majorly deals with Information Technology Services as well as Management Consulting and Management Services. The group number for the service is 99831 and the heading number is 9983. All these numbers and codes are essential for a taxpaying service or company for the purpose of GST Registration.
Overall Effect Of GST On The Digital And IT Sector
The software companies have had to reconstruct their software as well as hardware services in accordance with GST. This has increased several expenses for those in the IT sector.However a benefit of GST is for the IT sellers of goods and services in the form of the Input Tax Credits or ITC. The earlier system was in such a way that ERP was on a long term contract basis and the taxes were charged throughout the year. But with the introduction of GST, it is of a continuous or periodic nature. Check Out – the impact of GST in IT Sector.
The investment ability of IT companies have seen a rise due to the fact that only the tax amount needs to be paid by the consumers on the IT goods and services. IT companies can now claim on the input tax and the services of software development, BPO, consultancy, etc, are zero rated under the new GST rules and regulations. Freelancers providing IT services and e commerce sellers have to pay a service tax of 18 % which has increased from the rate of 12 %. However, those bloggers and freelancers with less than 20 lakh turnover do not need to register for GST.
Even though GST has brought about a lot of protest, it has had both positive as well as negative outcomes.It really has been a reforming rule that brought the Indian IT economy under a single tax levying system.